Roslyn Russell, Encouraging savings, rewarding effort

What is Saver Plus? Australia’s first matched savings program helping families on low incomes save for their children’s education by providing: –$2 for every $1 saved (up to $2,000 in matched funds) –Personal coaching and support –Financial literacy education

Background Based on the work of Michael Sherraden (Centre for Social Development, Washington University, USA) Individual Development Accounts (IDAs) based on asset building policies for low-income sector IDAs are implemented in many countries –UK currently piloting a government sponsored program, Saving Gateway

About Saver Plus Saver Plus was developed by ANZ and Brotherhood of St Laurence and the first phase of the pilot in 2003 / 2004 was conducted in: Frankston, Victoria with Brotherhood of St Laurence Shepparton, Victoria with Berry Street Victoria Campbelltown, New South Wales with The Benevolent Society

Eligibility Criteria 1.be a parent or guardian of a student/s who will be attending secondary school at the end of the savings period; 2.have children attending government schools in the Saver Plus pilot program areas; 3.have a current Health Care Card or Pension Card; 4.have regular income from paid employment; 5.be able to demonstrate a capacity to save after regular expenses have been paid

Financial Education Aims to create long-term savers Interactive program 12 hours in total Developed by the Victorian School Innovation Commission (VSIC) Modules include: –Benefits of saving and strategies to develop a savings habit –Identifying barriers to saving –Establishing effective goals –Useful information about services offered by financial institutions and how best to utilise them

Saver Plus Support Relationship Manager in each pilot site Responsible for: –Recruitment of the participants –Administration and maintenance of files –Delivery of the financial education program –Provide support and encouragement to the participants

The Evaluation To evaluate the extent to which the Saver Plus program meets the following objectives: –Assist up to 300 low-income earners to achieve a savings target –Increase the financial literacy skills of up to 300 low-income earners –Make recommendations about replicating the program including ways to encourage other groups to pick it up

Methodology Uses a mix of quantitative and qualitative techniques 1.Self-completion questionnaires given to participants at the time of joining the program 2.Banking data 3.Self-completion questionnaire given to participants at the beginning of the financial literacy education program 4.Depth interviews with management of program, relationship managers and relevant ANZ branch staff 5.Focus groups conducted during the savings period 6.Final questionnaire given to participants at the completion of the savings period – usually when they get their matched funds 7.Final focus groups conducted 3-4 months after savings period ends.

Interim evaluation results 268 participants Overall, participants are mostly female, sole parents aged between 30 and 50 years On average, have 2.6 dependent children; average age of the children being 11.8 Average saving per month is $75 (based on interim analysis July 2003 – March 2004) Most common goals being saved for: computer or computer accessories, books, uniforms

Participants’ initial perceptions Initial scepticism Participants thought it was too good to be true, there must be a ‘catch’ Overcoming the scepticism For some it was the involvement of ANZ; for others it was the community groups Mostly it was word-of-mouth from friends they trusted

Participants’ overall experience Rating Of Overall Experience Very Negative -3 Somewhat Negative -2 Slightly Negative Neutral 0 Slightly Positive +1 Somewhat Positive +2 Very Positive +3 Mean Score (25%)39 (75%)2.75 Overall the participants were extremely satisfied with the program

Financial education Participants were happy with the education program Helped them to achieve their savings goal Classes were an opportunity to build friendships and create support networks Satisfaction with Content of Education Program Very Unsatisfied -3 Somewhat Unsatisfied -2 Slightly Unsatisfied Neutral 0 Slightly Satisfied +1 Somewhat Satisfied +2 Very Satisfied +3 Mean Score (8%)11 (21%)37 (71%)2.63

Role of the Relationship Manager The personal qualities of the RMs were most appreciated RMs have great empathy & extreme commitment to the program and participants Satisfaction with Support Provided by Relationship Manager Very Unsatisfied -3 Somewhat Unsatisfied -2 Slightly Unsatisfied Neutral 0 Slightly Satisfied +1 Somewhat Satisfied +2 Very Satisfied +3 Mean Score (2%)3 (6%)48 (92%) 2.90

Strategies for Saving Distinguishing between wants and needs Enlisting the help of the family General planning and budgeting skills learned from the financial education program Examples Rationing take-away Making lunches instead of buying Car pooling

Factors assisting saving Making saving a priority Automatic deductions from pay Support and encouragement Involving the family Setting realistic goals Incentive – matched funds Education program Personal determination

Inhibitors to Saving Unexpected bills and expenses Illness without pay Not residing where there is an ANZ bank Loss of employment

Impact on Family Positive effect on the family Evidence of transference of skills to other family members Those who included the family seemed to do really well Very Negative -3 Somewhat Negative -2 Slightly Negative Neutral 0 Slightly Positive +1 Somewhat Positive +2 Very Positive +3 Mean Score 0002 (4%) 21 (40%) 27 (52%) 2.40 Rating of Effect on Family and/or Life Generally

Benefits from the program Increased levels of financial literacy Achieving a savings goal Increased confidence Development of support networks & friendships Feelings of better quality of life More control over their lives Growing confidence in the mainstream banking industry Flow-on effect to families “Saver Plus has meant an amazing change in my life… It’s taught me to save from a background of nothing. The kids can ask me for something now and I can say I’m capable of saving for that … and I’ve never, ever felt so proud of anything in my life.” Julie, Shepparton

Levels of Success At the interim point all but one of the focus group participants felt they were on track in achieving their goals. All expected to succeed in the end Very Unsuccessful -3 Somewhat Unsuccessful -2 Slightly Unsuccessful Neutral 0 Slightly Successful +1 Somewhat Successful +2 Very Successful +3 Mean Score 001 (2%)0 13 (25%)37 (71%)2.61 Rating of success to date

Longer Term Saving 100% of respondents in the focus groups said they would continue to save “Regardless of the matching, we’ve seen that it can be done, so we’ll keep doing it” (Campbelltown, group 1)

Conclusions The program is working well towards achieving its goals –Increasing financial literacy –Assisting participants to achieve a savings goal –Assist in creating the desire for longer term savings habit All elements of the program are critical to its success –The matched savings seems to serve as a ‘hook’ in attracting the participants to the program, but the education and the support become the more important elements to helping in achieving the goals.

Where to from here? The first savings period ended in December 2004 –(final analysis is being currently underway) Following early success, the pilot has been extended to: – South Brisbane and Gold Coast corridor with The Smith Family – The second savings period will run from January – December 2005

Thank you